Employee benefits startup Swile expects to become profitable next quarter

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French startup Swile shared some revenue metrics just a year after merging with Bimpli, the employee benefits division of BPCE. Swile’s main product is a payment card for employee benefits, such as meal vouchers.

In 2022, Swile generated €138 million in revenue ($153 million at today’s exchange rate) — that includes Bimpli’s revenue. And yet, the company’s losses widened to €72 million ($80 million). In other words, 2022 has been a mixed bag.

But the company says that this was a transitioning phase, as Swile expects to turn a profit on an EBITDA basis starting next quarter. It doesn’t mean that Swile will be profitable for the entire year, but the company is at an inflection point.

The reason Swile has been losing so much money is that it raised $200 million in a Series D funding round led by SoftBank Group International back in 2021.

“We raised €200 million after all. And we didn’t do it so that we could go out and drink mojitos. It was about continuing to gain market share. And it worked, as we continued to win market share in 2022,” Swile founder and CEO Loïc Soubeyrand told me.

So what’s Swile’s market share then? In France, companies have to contribute to lunch when it’s in the middle of a work day. Some companies offer a cafeteria with cheap meals, others hand out meal vouchers that you can spend in restaurants and bakeries.

According to the CNTR, meal voucher companies handled a transaction volume of €8.5 billion in France in 2022 alone. Swile says that it handles €3 billion in transaction volume per year. Other big players in the space include Edenred, Up Coop and Sodexo.

“We have 5 million users in France and 500,000 in Brazil. So that’s 5.5 million in total, of which more than two-thirds use meal vouchers as we also handle gift vouchers,” Soubeyrand said.

There’s still some room for growth in Swile’s home market, as 40% of employees who receive meal vouchers are still using paper vouchers. At some point, Swile and other meal voucher providers expect that these companies will switch to payment cards.

“On top of that, what’s really interesting to note is that this is a market that has been growing natively and organically for the past three years, at double-digit rates. We’ve had over 10% growth for the past three years,” Soubeyrand said.

Due to the COVID-19 pandemic and many companies allowing remote work, some employees who used to go to the cafeteria now prefer to receive meal vouchers. Similarly, due to inflation, many companies allocate more money to meal vouchers.

Next destination: Travel & expenses

While Swile still expects to generate the majority of its revenue from meal vouchers, the company has been testing a corporate travel booking platform. Last year, Swile acquired Okarito and rebranded it to Swile Travel. It is currently available in beta.

“It’s going to become Swile Travel and we’ve just integrated it into our super app, because the aim is to use a single app to unify this experience,” Soubeyrand said.

There are 85,000 companies that are already using Swile, and the company plans to tap this user base to launch this new product. It will compete with American Express and Egencia as well as newer entrants like Navan (formerly known as Trip Actions) and TravelPerk. Up next, Swile will add expense management to its suite of products as well.

“This industry is called travel & expenses. For now, we officially have the travel platform. And of course, once you travel, you need to make a few small expenses. And you already have the Swile card in your pocket,” Soubeyrand said.

Swile already says that it isn’t going to be profitable in 2023. The company will become profitable next quarter and will hopefully remain profitable every quarter after that.

In 2024, Swile expects to report €30 million in EBITDA for the French market. In 2025, that number should rise to €50 million to €70 million.

“We’re giving ourselves five years to diversify our revenue lines beyond employee benefits,” Soubeyrand said. “And we really want all travel & expense revenue — and perhaps other future revenue lines — to account for at least 25% of our revenue within five years.”

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